U.S. aluminum tariffs will benefit other countries, Canada says
Ambassador to U.S. says Swiss, Russian firms stand to gain
Canada’s latest argument against U.S. President Donald Trump’s aluminum tariffs on the country is that it will help foreign companies more than U.S. firms.
The Canadian ambassador to the U.S. said Wednesday that two of the biggest beneficiaries from the Trump administration’s reimposition of10 per cent tariff on some imports from Canada will be a Swiss trading firm and a Russian producer. Ambassador Kirsten Hillman also said in an interview that while Canada hopes the U.S. will reconsider, it’s ready to retaliate.
“The beneficiary of this tariff is a Swiss trading company and Rusal aluminum of Russia,” said Hillman. “Century Aluminum and Magnitude 7 Metals have been calling for this measure, and the rest of the industry, which represents 97 per cent of American jobs in the aluminum sector, they oppose these taxes on their operations.”
Hillman alleged that commodity trading giant Glencore Plc directly or indirectly asserts a degree of control or influence over Century Aluminum Co. and Magnitude 7 Metals LLC, two U.S.based companies that have been asking the Trump administration to reimpose
tariffs. Glencore has about a 47 per cent interest in Century, according to its 2019 annual report. Magnitude 7 was formed by a former Glencore trader, according to reports.
According to Hillman, Russian metals producer United Co. Rusal also stands to benefit from more-expensive Canadian aluminum imports, as Glencore has exclusive right to sell Rusal’s aluminum into the U.S. market. Rusal in April announced it planned to sign a $16-billion (U.S.) deal to sell aluminum to Glencore.
Glencore and Rusal declined to comment on Hillman’s remarks.
The comments come at a delicate time for the neighbouring countries, just days before the U.S. officially reimposes the tariffs Trump announced last week. Canada supplies about half of the aluminum consumed in the U.S., and the action would come only weeks after the new U.S.-Mexico-Canada regional trade agreement went into effect.
Hillman said that Canada is hoping the U.S. will reconsider the action, adding that Canada is prepared to respond “forcefully,” with the objective of the countermeasures to have the “strongest possible impact” on the U.S. Hillman said the retaliation, if the U.S. goes through with the tariffs, will be specific to aluminum and aluminum-containing products, not other goods like agriculture.
Potential targets for retaliation include as much as $283 million worth of exports from Michigan and $152 million from Wisconsin, Hillman said. Those are two battleground states that Trump carried by narrow margins in the 2016 election.
“We’re trying to have a strong impact in the U.S., while at the same time minimizing the downside for Canadian importers and consumers,” Hillman said, explaining why Canada decided to implement a 30-day consultation period.
The all-in price U.S. consumers pay for aluminum is lower in 2020, with the benchmark price down 2.5 per cent and the price to ship the metal to the U.S. Midwest down about two per cent.